Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narveker@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

Vaishali Sheth - Research Associate vaishalij.sheth@angelbroking.com (022) 2921 2000 Extn. 6133
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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
News in brief
AP, TN raise support price for sugarcane
Sugar mills in Tamil Nadu have welcomed the balanced approach by the State Government in pricing sugarcane for the 2012-13 season. Reacting to the announcement on Monday in which the State Advised Price (SAP) for a tonne of sugarcane was fixed at Rs 2,350 linked to a sugar recovery of 9.5 per cent, representatives of the South Indian Sugar Mills Association said it is a fair price that takes into account the viability for farmers and sugar mills. Farmers, however, have expressed dissatisfaction over the cane price. The State Government announced the price taking into account the Fair and Remunerative Price of Rs 1,700 set by the Unionl Government and last season price of Rs 2,100 a tonne The price includes Rs 100 a tonne towards transport cost. M. Manickam, President of the South Indian Sugar Mills Association, and Vice-Chairman of Sakthi Sugars, said the hike in sugarcane price is a fair decision and fully passes on the Centres hike. The Andhra Pradesh Government has asked the private and joint venture sugar factories in the State to consider the demand of sugar cane growers to pay Rs 3,000 a tonne of cane keeping in view of abnormal increase in cost of cultivation.
(Source: Business Line)

Market Highlights (% change)

Last Prev. day

as on Nov 20, 2012

WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

18329 5572 55.11 86.75 1723

-0.05 0.00 0.24 -2.83 -0.62

-1.83 -1.97 0.40 1.38 -0.41

-1.51 -1.57 4.24 -5.83 -1.62

11.35 12.90 8.14 -12.21 0.20

Source: Reuters

Malaysia's Nov 1-20 palm oil exports down 3.8 pct -SGS - RTRS
Exports of Malaysian palm oil products for Nov. 1-20 fell 3.8 percent to 1,010,417 tonnes compared with 1,050,548 tonnes shipped during Oct. 1-20, cargo surveyor Societe Generale de Surveillance said on late Tuesday. (Source: Reuters)

PSUs contract 11.5 lakh tonnes of FCI wheat for export so far
The public trading agencies have contracted about 11.5 lakh tonnes of FCI wheat for exports and have shipped about seven lakh tonnes so far. To clear surplus stocks in the Food Corporation of India (FCI), the Centre has allowed export of 20 lakh tonnes of wheat through PSUs such as MMTC, STC and PEC by March 2013. "Out of 20 lakh tonnes, as much as 11.5 lakh tonnes has been contracted for export and about 7 lakh tonnes has been shipped so far," a senior Food Ministry official told PTI. The PSUs hope to give contracts for the rest of the quantity by February next year, the official said. Wheat shipments from India have fetched higher price in the range of $300-319 per tonne. Recently, a tender was awarded at $315 a tonne, higher than $308 a tonne quoted on the Chicago Board of Trade (CBoT). Wheat stocks in the central pool stood at 405 lakh tonnes, as on November 6, almost double the 212 lakh tonnes of the actual buffer requirement for the same period. The government godowns are overflowing due to a record production and procurement in the last two consecutive years. (Source: Economic Times)

UP farmers turn jittery on delay in fixing cane support price

Sugarcane growers in Uttar Pradesh are getting jittery over the delay in announcement of the State Advised Price (SAP) for the 2012-13 (October-September) season by the State Government. As a result, only about eight to ten factories have started crushing operations unlike 43odd mills around this time last year. There is an immense delay in SAP announcement this year, said V.M. Singh, Convenor of the Rashtriya Kisan Mazdoor Sanghatan. He said the State Government is acting under pressure from millers to delay the SAP announcement. Such a move, while benefiting the millers in terms of better recovery as they get more of matured cane, makes it difficult for farmers to vacate the fields for planting of wheat. This year, the UP Government has not even ensured that mills start their crushing operations around November 1, Singh said. As a result of delayed crushing, the farmers are forced to sell their ratoon cane to kolhus and crushers at a lower price of around Rs 150-160 a quintal over the past few days, Singh said. (Source: Business Line)

U.S. wheat crop ratings fall more than expected - RTRS

The U.S. Agriculture Department said on Monday its rating of the winter wheat crop fell to 34 percent good to excellent, below analysts' expectations, due to persistent dry conditions in the U.S. Plains. The ratings were a record low for November and raised questions about how healthy the crop will be when it emerges from dormancy in the spring. The average of estimates in a Reuters poll of 10 analysts forecast goodto-excellent ratings for U.S. wheat to fall to 35 percent as of Nov. 18 from 36 percent a week earlier. Forecasts ranged from 32.5 percent to 37 percent. The above normal temperatures could prevent the crop from entering dormancy, which could lead to wheat ratings declining even further in coming weeks. Also, the poor condition of the crop left it vulnerable to stresses such as soil erosion throughout winter dormancy.
(Source: Reuters)

Bengal farmers running out of cold storage space

Potato and tomato farmers in Bengal are staring at storage crunch this year. More than 10 cold storages have been shut this year and a few more are likely to down shutters soon due to increasing operational cost. With the harvest season starting next month, its going to be a tough time for farmers. More than 420 cold storages out of 470 in the state observed a day-long strike on Monday protesting the state governments decision of not increasing the rentals. The state government controls rent for the cold storages loading potato. Patit Paban Dey, a member of the West Bengal Cold Storage Association, said, If rentals are not revised, many of the cold storage owners will be forced to down shutters. That will be disastrous for farmers but we are unable to run cold storages at the present rates. According to him, while operational costs have gone up by 50% in last three years, there has been no change in the rentals since 2010. (Source: Financial Express)

China confirms to stockpile domestic corn, soy at higher prices

China confirmed on Wednesday that it would stockpile corn and soybeans grown domestically at higher prices than last year to help farmers' incomes. The government will pay 4,600 yuan ($740) per tonne of soy and 2,100-2,140 yuan per tonne of corn to farmers in northeastern provinces, the country's major corn area, the State Administration of Grain said. Those prices are around 15 percent higher than offered last year, a source who had seen government documents on the step told Reuters in mid-November. The stockpiling programme will end on April 30 next year, said the bureau, which requires state warehouses to accept as much as farmers can sell. (Source: Reuters)

Rains forecast for coastal TN, Andhra

As expected, the depression over West-central Bay of Bengal has weakened overnight to a well-marked low-pressure area on Tuesday. It will undergo another round of weakening before it curls in towards the north Tamil Nadu-south Andhra Pradesh coasts in another couple of days. Global models are forecasting a wave of fresh rains for southern Tamil Nadu and adjoining Kerala from end-November into early December. (Source: Business Line)

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Chana
Chana futures extended losses and settled lower by 1.0% as prospects of better sowing is pressurizing the prices. Overall demand for chana will be subdued in the coming days while supplies are expected to ease amid higher shipments. Except for Wheat, minimum support price of all other Rabi crops has been increased by CCEA for 2012-13 season. MSP of Chana/Gram is raised by Rs 200 per qtl for 2012-13 season to Rs 3000. Higher returns and favorable soil condition will definitely boost acreage in the coming season. Total pulses acreage is so far down this year by 17% to 65.3 lakh hectares. However, according to state farm department data, pulses sowing is higher in Maharashtra and AP, while it is lagging behind in Rajasthan. Area under Chana cultivation in Maharashtra is up by 20 percent at 4.9 lakh hectares. While in Andra Pradesh it is at 4.64 lakh hectares compared with 3 lakh hectares. However, in Rajasthan, sowing is much behind last years level due to late harvesting of kharif crops on account of delayed and deficient rains. As per the NCDEX circular dated 9 November, the pre expiry margin on Chana November 2012 contract has been increased from the existing 3% to 7% for last 5 trading days increased on a daily basis on both buy and sell sides. In Rajasthan, the third largest Chana producing states, sowing is lagging behind by almost 55% and stands at 5.45 lakh hectares as on th 9 November, 2012. The Commission for Agriculture Costs and Prices (CACP) has suggested 10 per cent import duty on pulses to encourage domestic production. in the first six months of the new fiscal that is from April to September this year, imports were an estimated 12 lakh tonnes.
th

Market Highlights
Unit Rs/qtl Rs/qtl Last 4554 4629 Prev day -1.27 -1.09

as on Nov 20, 2012 % change WoW MoM -0.87 -0.73 -1.49 0.17 YoY 42.31 47.42

Chana Spot - NCDEX (Delhi) Chana- NCDEX Nov'12 Futures

Source: Reuters

Technical Chart - Chana

NCDEX Dec contract

Source: Telequote

Technical Outlook
Contract Chana Dec Futures Unit Rs./qtl Support

valid for Nov 21, 2012 Resistance 4350-4385

4220-4280

Sowing progress and demand supply fundamentals

Improved rains towards the end of monsoon season coupled with hike in MSP have raised prospects of Chana sowing in the 2012-13 season. Also, farm ministry has targeted 7.9 mn tn chana output for 2012-13 season, higher compared to 7.58 mn tn in 2011-12. According to the Ministry of Agriculture 99.81 Lakh hectare area has been planted under Kharif pulses in 2012-13 compared to 108.28 lakh hectare (ha) in the previous year. According to the first advance estimates of 2012-13 season, kharif pulses output is estimated lower by 14.6% at 5.26 million tonnes compared with 6.16 mn tn last year. Kharif pulses harvesting would commence from next month. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source: Agriwatch)

Outlook
Chana futures may remain under downside pressure on expectations of ease in supplies amid higher shipments coupled with subdued demand. Going forward, prices may also take cues from sowing progress of Rabi pulses which is expected to gain momentum in the coming days.

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Sugar
Sugar Dec Futures underwent losses and settled lower by 1.17% as reports of upward revision in sugar production for 2012-13 season led to downside pressure in the prices. However, delay in cane crushing in the key producing states might provide support to the prices at lower levels 9.84 lakh tons of sugar has been produced in the current sugar season 2012-13 upto 15th November, 2012. This is about 2 lakh tons higher to the production in the corresponding period last year of 7.76 lakh tons upto 15th November, 2011. (Source: PIB) Usually most factories in Maharashtra, the top sugar producer in the country, start cane crushing by the first week of November, but it has been delayed this year as farmers and mills have not yet agreed on cane prices. The sugar unions are demanding Rs 3000 per qtl. In UP too crushing normally starts in the first week of November, but this year also crushing is delayed due to disputes over cane pricing. Despite festival season, prices remained under check this season as government has released higher quota of 40 lakh tonnes for October and November, compared to 34.6 lakh tonnes during 2011. Liffe white sugar as well as ICE raw sugar closed marginally lower on Tuesday as pick up in supplies from Brazil and pace in sugar crushing in Thailand pressurized the prices to trade on a negative note. Higher pace of crushing in Brazil, higher output and lower imports expectations for the 2012-13 season from China coupled with higher sugar surplus forecast for fourth straight year has led to a sharp decline in international sugar prices during the past few weeks.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX Nov '12 Futures Rs/qtl Last 3472

as on Nov 20, 2012 % Change Prev. day WoW -0.08 0.64 MoM -0.42 YoY 12.45

Rs/qtl

3536

0.54

4.28

8.17

18.14

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMar'13 Futures Sugar No 11-ICE Mar '13 Futures $/tonne $/tonne Last 523.9 442.22

as on Nov 20, 2012 % Change Prev day WoW -0.46 -0.20 -2.44 2.84 MoM -4.38 -1.63 YoY -13.46 -13.82

Source: Reuters

Technical Chart - Sugar

NCDEX Dec contract

Domestic Production and Exports

According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year. Despite of higher acreage, the producers body has estimated next years sugar output lower at 24 mn tn, down by 2mn tn compared to the current year. Sugar production in India the worlds second-biggest producer touched 26 million tonne since October 1, 2011. Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13. With the opening stocks of 6 mn tn, domestic Sugar supplies are estimated at 30mn tn against the domestic consumption of around 22.523 mln tn for 2012-13. Thus, no curbs on exports are seen as of now.

Source: Telequote

Technical Outlook
Contract Sugar Dec NCDEX Futures Unit Rs./qtl Support

valid for Nov 21, 2012 Resistance 3305-3320

Global Sugar Updates

Sugar output in Brazil jumped 57% during the first fortnight of October. Thus, sugar output in brazil which was lower compared to last year since the beginning of the crushing season in May, is now up marginally by 0.1% at 29.3 mn tn. Brazil exported 3.998 million tons of sugar, raw value, in October up from 2687 million tons in September. Brazil has exported only 15.59 million tons of sugar this year till October which was 17.17 million tons, raw value, last year same period. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tonnes in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tonnes. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12. (Source: Reuters)

3248-3270

Outlook
Sugar prices may trade sideways with downward bias as upward revision in the production of sugar this season might pressurize the prices. Also sufficient supplies due to higher non-levy quota might cap the upside. However delay in cane crushing in few sugar producing states might provide support to the prices at lower levels.

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Oilseeds
Soybean: Soybean Dec futures traded on a negative note and
settled 0.4% lower yesterday due to short covering of the recent gains. Also, improved arrivals post diwali seemed to pressurize the prices Soy meal exports during October are down 49,840 tn in October, the seventh consecutive month of fall in the current fiscal year, from 223,594 tn a year ago. This is because; most export commitments were done for forward trade like Nov-Dec amid uncertainty over supplies in October. According to first advance estimates, Soybean output is pegged at 126.2 lakh tn for 2012-13.

Market Highlights
Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX Nov '12 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 3311 3273 718.6 714

as on Nov 20, 2012 % Change Prev day 0.42 0.34 0.64 0.41 WoW 1.63 1.07 4.43 3.72 MoM 1.69 1.02 2.26 4.56 YoY 45.60 43.33 11.20 9.72

International Markets
CBOT Soybean settled higher by 1.29% on reports of forecast of fall in production in South America and brazil by Oilworld supported the upside. However reports of favorable weather in these countries in coming days might again ease the prices. The National Oilseed Processors Association (NOPA) reported the U.S. soybean crush for October at 153.536 million bushels, the largest monthly figure since January 2010 and the highest for October since 2009. According to the USDA November monthly report, The U.S. Department of Agriculture on Friday raised its estimate for soybean production by 4% from its forecast last month, saying that rainfall late in the growing season softened the impact of the U.S. drought. Area and production in Argentina for MY 2012-13 are maintained at 19.7 million hectares and 55 million tonnes, respectively. Brazil's government on 8 Nov 2012 edged up its forecast for a record 2012/13 soybean crop to between 80.1 and 83 mn tn.
th

Source: Reuters

as on Nov 20, 2012 International Prices Soybean- CBOTNov'12 Futures Soybean Oil - CBOTDec'12 Futures Unit USc/ Bushel USc/lbs Last 1413 48.32 Prev day 1.29 0.90 WoW -1.00 2.76 MoM -8.65 -6.47
Source: Reuters

YoY 23.06 -3.15

Crude Palm Oil

as on Nov 20, 2012 % Change Prev day WoW -0.71 -0.53 5.34 1.12

Unit
CPO-Bursa Malaysia Nov '12 Contract CPO-MCX- Nov '12 Futures

Last 2369 435

MoM -1.17 2.43

YoY -27.58 -15.45

MYR/Tonne Rs/10 kg

Refined Soy Oil: Ref soy oil traded on a positive note due to
demand for the edible oil while MCX CPO traded lower yesterday tracking the weak international BMD prices. Exports of Malaysian palm oil products for Nov. 1-15 were 769,087 tonnes, down 0.1 percent from 769,534 tonnes exported in the Oct. 1-15 period. According to latest data from SEA, total vegetable oil imports in September were 993,912 tn, up from 897,018 tn in the previous month. As per MPOBs latest report, Malaysia's September palm oil stocks rose 17 percent to record high 2.48 million tons compared to previous month.

Source: Reuters

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX Nov '12 Futures Rs/100 kgs Rs/100 kgs Last 4300 4199 Prev day -0.58 -1.15

as on Nov 20, 2012 WoW 3.37 -0.12 MoM 3.86 -1.32

Source: Reuters

YoY 36.94 31.01

Technical Chart Soybean

NCDEX Dec contract

Rape/mustard Seed: Rm seed futures settled lower by 1.37% as

prospects of better sowing is putting downside pressure on the th prices. Rabi oilseeds sowing as on 10 November was reported at 43.21 lakh ha as compared to 35.18 lakh ha in the same period last year. MSP for Mustard seed is increased by 20% from Rs 2500/Quintal to Rs 3000/Quintal for 2012-13 season.

Outlook
Edible oil complex may trade sideways with negative bias today on expectations of arrivals to improve in the current week might pressurize the prices. However, higher crushing led by robust demand soy meal in the domestic as well as global markets may restrict a sharp downside.

Source: Telequote

Technical Outlook
Contract Soy Oil Dec NCDEX Futures Soybean NCDEX Dec Futures RM Seed NCDEX Dec Futures CPO MCX Nov Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for Nov 21, 2012 Support 686-692 3205-3235 4140-4180 430-437 Resistance 706-713 3310-3340 4262-4296 445-450

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Black Pepper
Pepper futures traded on a mixed note yesterday. Over the last couple of days prices have corrected sharply on reports that FMC has launched probe into complaints against pepper market movement. Also expectations of better output in the domestic as well as the international markets pressurized prices. Farmers are trying to liquidate their stocks ahead of the commencement of arrivals of the fresh crop. Exports demand for Indian pepper in the international markets remains weak due to huge price parity. However, there is good festive as well as winter demand. The Spot settled 1.2% lower while the December Futures settled 1.45% lower on Monday. Pepper prices in the international market are being quoted at $7,750/tn(C&F) while Vietnam was offering Austa at $7,000/tn, Brazil Austa at $6,700/tn, and Indonesia Austa at $6,500/tn (FOB).

Market Highlights
Unit Pepper SpotNCDEX (Kochi) Pepper- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 39669 39325 % Change Prev day 0.08 -2.13

as on Nov 20, 2012 WoW -3.47 -4.98 MoM -7.07 -11.29 YoY 13.80 11.42

Source: Reuters

Technical Chart Black Pepper

NCDEX Dec contract

Exports
According to Spices Board of India, exports of pepper in April 2012 fell by 47% and stood at 1,200 tonnes as compared to 2,266 tonnes in April 2011. India imported 1,848 tonnes of pepper till March 2012 and has become the third country to import such large quantity after UAE and Singapore. (Source: Agriwatch) According to Vietnam Ministry of Agriculture and Rural Development (MARD) exports of black pepper in 2012 are forecasted at around 1,25,000 tonnes. Exports of Pepper from Vietnam during January till September 2012 is estimated around 80,433 mt, higher by 4.3% in volume and 31.7% in value compared to corresponding year last year. Exports of Pepper from Brazil during January till May 2012 are estimated around 13369 mt. (Source: Peppertradeboard). Pepper imports by U.S. the largest consumer of the spice declined 14.8% in the first 2 months of the year (2012) to 8810 tn as compared to 10344 tn in the same period previous year. Imports of Pepper in the month of February declined by 16.8% to 3999 tn as compared to 4811 tn in the month of January 2012. Exports from Indonesia posted significant decrease of 42% as compared to previous year. Exports stood at 36,500 tonnes as compared to 62,599 tonnes in the last year. During May 2012 Brazil exported 1,705 tonnes of pepper as against 1600 tn in May 2011.

Source: Telequote

Technical Outlook
Contract Black Pepper NCDEX Dec Futures Unit Rs/qtl

valid for Nov 21, 2012 Support 38350-38680 Resistance 39400-39680

Production and Arrivals

The arrivals in the spot market were reported at 5 tonnes while offtakes were 4 tonnes on Tuesday. As per IPC, Global pepper production in 2012 is projected at 3.27 lk tn, up by 12.7% compared with 2.98 lk tn in 2011. Indonesian pepper output Is expected to rise by 24% and in Vietnam by 10%. According to previous estimates, report pepper output in Vietnam is estimated to be 1.35 lakh tonne as compared to 1.10 lakh tonne estimated early in the beginning of year (2012). Brazil is also expected to produce 22,000 tn this year. Domestic consumption of Pepper in the world is expected to grow by 3.03% to 1.25 lakh tonnes while exports are likely to grow by 1.48% to 2.46 lakh tonnes in 2012. (Source: Pepper trade board) On the other hand production of pepper in India in 2011-12 is expected to decline further by 5% to 43 thousand tonnes as compared to 48 thousand tonnes in the last year. Production is lowest in a decade.

Outlook
Pepper is expected to trade sideways to downward today. Liquidation pressure from farmers as well as low export demand may pressurize prices. Good supplies in the international market from other origins may also keep prices under check. However, festive season as well as winter demand may support prices at lower levels.

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Jeera
Jeera Futures recovered from lower levels yesterday on account of short coverings. The sowing of the crop is going on and is expected to gain momentum in the coming days, and have pressurised prices over the last couple of days. However, export demand supported prices at lower levels. Sowing in Gujarat is currently lower by 15-20%. Festive demand is also expected to improve. Exporters have been buying due to tensions between Syria and Turkey. The spot remained closed due to Diwali while the December Futures settled 44% lower on Monday. According to markets sources about 75% exports target has already been achieved due to a supply crunch in the global markets. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,850 tn (c&f) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 4-5 lakh bags lower by around 3 lakh bags last year.

Market Highlights
Unit Jeera SpotNCDEX(Unjha) Jeera- NCDEX Nov '12 Futures Rs/qtl Rs/qtl Last 15064 14473 Prev day 0.00 0.77

as on Nov 20, 2012 % Change WoW 0.00 -1.93 MoM -0.75 -4.30 YoY 6.22 5.78

Source: Reuters

Technical Chart Jeera

NCDEX Dec contract

Production, Arrivals and Exports

Unjha markets witnessed arrivals of 10,000 bags, while off-takes stood at 10,000 bags on Tuesday. Production of Jeera in 2011-12 is expected to be around 40 lakh bags as compared to 29 lakh bags in 2010-11 (each bag weighs 55 kgs). (Source: spot market traders). According to Spices Board of India, exports of Jeera in April 2012 stood at 2,500 tonnes as compared to 2,369 tonnes in April 2011, an increase of 6%.

Source: Telequote

Market Highlights
Prev day -0.30 -1.83

as on Nov 20, 2012 % Change

Outlook
Jeera futures are expected to trade downwards today. Prices may correct as farmers are liquidating their stocks for want of cash. However, sharp downside may be capped due to export demand. In the medium term (November-December 2012), prices are likely to stay firm as there are limited stocks with Syria and Turkey.
Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX Nov '12 Futures

Unit Rs/qtl Rs/qtl

Last 5033 5158

WoW -0.57 -5.29

MoM 0.23 2.67

YoY -8.27 10.26

Turmeric
Turmeric Futures traded on a negative note yesterday for the due to weak overseas demand. Stockists have good carryover stocks with them. The spot also remained weak. Turmeric has been sown in 0.58 lakh hectares in A.P as on 10/10/2012. Sowing is also reported 30-35% lower during the sowing period. The Spot as well as the December Futures settled 0.3% and 0.83% lower on Tuesday. Production, Arrivals and Exports Arrivals in Erode and Nizamabad mandi stood at 5,000 bags and 800 bags respectively on Tuesday. Turmeric production for the year 2011-12 is projected at historical high of 90 lakh bags (1 bag= 70 kgs) compared to 69 lakh bags in 201011. Erode is expected to produce 55 lakh bags of turmeric a rise of 29% as compared to previous year. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric prices are expected to trade on a negative note today on account of good carryover stocks with the stockists. However, good demand from North India coupled with low arrivals in Erode mandi is expected to support prices.

Technical Chart Turmeric

NCDEX Dec contract

Source: Telequote

Technical Outlook
Unit Jeera NCDEX Dec Futures Turmeric NCDEX Dec Futures Rs/qtl Rs/qtl

Valid for Nov 21, 2012

Support 14520-14680 4920-4970 Resistance 14960-15080 5076-5120

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Commodities Daily Report

Wednesday| November 21, 2012

Agricultural Commodities
Kapas
NCDEX Kapas futures settled marginally lower by 0.15% on the back of weak international markets. As on 4th November 2012, 13.02 lakh bales of Cotton has arrived so far, down by 29% compared to last year 18.57 lakh bales during the same period. ICE cotton futures higher by 0.62% as reports of emergence of demand of higher grade cotton from China supported the upside. Cotton harvesting has commenced in US, in all 84% is harvested as compared to 75% a week ago, versus 85% same period a year ago. Cotton crop condition is 43% in Good/Excellent state compared to 29% th same period a year ago as on 20 Nov 2012.

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 980.5 16270

as on Nov 20, 2012 % Change Prev. day WoW -0.10 0.62 0.25 0.62 MoM -1.85 0.62 YoY #N/A -3.50

NCDEX Kapas Futures MCX Cotton Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit Usc/Lbs Last 72.5 81.35

as on Nov 20, 2012 % Change Prev day WoW 0.62 2.39 0.00 0.00 MoM -5.70 0.00 YoY -20.07 -29.20

Domestic Production and Consumption

According to Cotton Advisory Boards (CAB) latest estimates for 2012-13 season that commenced in October, domestic cotton production is pegged 334 lakh bales, down 5.6% from the previous years estimates of 353 lakh bales. Lower opening stocks coupled with estimated lower output will result in lower supplies this season at 374 lakh bales, a decline of 8.7% compared with last years 410.77 lakh bales. On the consumption front, domestic consumption is estimated higher at 270 lakh bales on the back of higher mill consumption. However, after witnessing record exports in 2011-12 season, Indian exports could witness significant fall this season on the back of lower availability along with unattractive domestic cotton prices. CAB estimates cotton exports at 70 lakh bales this season, compared with 128.8 lakh bales last year.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Global Cotton Updates

The U.S. government has raised its 2012/13 forecast for global cotton inventory to above 80 million 480-pound bales for the first time due to larger-than-expected output in the United States, the world's third largest producer, and falling demand from China, the world's largest consumer. In its monthly crop report, the U.S. Department of Agriculture increased its estimate for 2012/13 ending stocks for a fourth straight month to a new all-time high of 80.27 million bales. Higher global ending stocks are seen capping the upside in the cotton prices this year too. However, downside is also limited as prices are again nearing its 12 year average price of 65 cents per pound. Markets will now take cues from the Chinese demand for cotton and trade policies of India with respect to cotton exports. In its November monthly demand supply report, the Agriculture Department (USDA) raised its cotton crop for 2012/13 cotton crop season to 17.45 mln bales (Prev 17.29) along with upward revision in end stocks 5.80 mln 480 pounds/bales (Prev 5.60). Exports were unchanged at 11.60 mln 480 pounds/bales.
Source: Telequote

Technical Chart - Cotton

MCX Nov contract

Source: Telequote

Outlook
Cotton prices might trade sideways as harvesting pressure is weighing on the prices. Also, weak international market might cap the upside. However, no major downside is expected in the domestic markets as farmers will not sell their stocks at very low prices. Also, CCI procurement at MSP levels may support prices from falling sharply.

Technical Outlook
Contract Kapas NCDEX April Kapas MCX April Cotton MCX November Unit Rs/20 kgs Rs/20 kgs Rs/bale

valid for Nov 21, 2012 Support 962-970 963-972 16000-16140 Resistance 991-1003 992-1005 16380-16560

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